I understand the fear (and it's often cited as a reason) but how does cash help with that? If it comes to a hyperinflation it will be worthless – this is exactly what happened last time.
But before that there will be people trying to get cash out of the atm. And those who have cash already have a slight advantage, when there is no more cash at the atm because the bank went bankrupt.
But apart from that, it is more a psychological thing, I guess. Cash you can hold in your hands, feels more safe than just some plastic card.
So it is more about feeling, than real security I think.
But there is also the privacy issue. Paying with cash is anonymous. This is still a big thing and maybe the more important factor why cash is more important in germany ...